Monday Morning Market Headlines
Five Stories Moving the Market:
UBS to buy Credit Suisse in historic deal to end crisis – Bloomberg. UBS Group agreed to buy Credit Suisse Group for $3.3 billion in a historic, government-brokered deal aimed at containing a crisis of confidence that had started to spread across global financial markets.
ECB's Holzmann expects more rate hikes to fight dogged inflation – Reuters. Inflation in the eurozone is proving tougher to crack than expected and the European Central Bank will likely need to raise interest rates further, possibly above 4%, Austrian central bank chief Robert Holzmann said on Saturday.
Fed to consider a pause as fallout from SVB roils markets – Bloomberg. Federal Reserve officials face their biggest challenge in months as they weigh whether to keep raising interest rates this week to cool inflation or take a pause amid the market turmoil fueled by recent bank failures.
At the China-Russia border, the Xi-Putin alliance shows signs of fraying – WSJ. The meeting in Moscow this week between Chinese leader Xi Jinping and Russian President Vladimir Putin is expected to showcase what they have declared a partnership with “no limits” between their countries; but beneath the surface are economic, political, cultural, and historical divisions that undercut the relationship.
Belgian central-bank chief says ECB likely to keep boosting interest rates – Reuters. The ECB is likely to keep raising interest rates as a repeat of the 2008 financial crisis is unlikely with European banks subject to tougher rules than regional U.S. banks, Belgian central bank chief Pierre Wunsch said.
Market Headlines:
Global Macro:
The Federal Reserve and five other central banks announced coordinated action on Sunday to boost liquidity in U.S. dollar swap arrangements, the latest effort by policymakers to ease growing strains in the global financial system - Bloomberg.
Russia, China, and Iran have completed three-way naval exercises in the Arabian Sea that included artillery fire at targets on the sea and in the air, the Russian defense ministry said on Saturday - Reuters.
In his first trip to territory seized in the past year, Russian President Vladimir Putin visited the occupied Ukrainian port city of Mariupol, which for Russia is a symbol of its goal to control eastern Ukraine, and for Kyiv an illustration of Russian atrocities - WSJ.
Taiwan’s exports of integrated circuit chips to China and Hong Kong fell for a fourth month in February as Washington-Beijing tensions simmer and demand for electronics continues to drop off - Bloomberg.
Germany's education minister will visit Taiwan this week with a view to improving cooperation between Berlin and Taipei on semiconductors, a ministry spokesperson said on Friday, adding that the issue of sovereignty will not be the focus of the trip - Reuters.
Protesters set fires and clashed with police in the French capital of Paris and other cities for the third consecutive day after President Emmanuel Macron pushed through his divisive pension overhaul bill without a vote in parliament - WSJ.
About $17.3 billion of Credit Suisse bonds have become worthless after a takeover of the firm by rival UBS - Bloomberg.
The International Criminal Court (ICC) on Friday issued an arrest warrant for Russian President Vladimir Putin, alleging Moscow's forcible deportation of Ukrainian children is a war crime, as the Kremlin reacted with outrage - Reuters.
The Biden administration is accelerating its efforts to pursue trade agreements that bypass Congress as it seeks to counter China, but the moves have sparked a fight with lawmakers that threatens to upend the president’s trade strategy at a critical point of rising global competition - WSJ.
U.S. regulators are moving toward a breakup solution for Silicon Valley Bank after failing to line up a suitable buyer for the entire company, according to people familiar with the matter - Bloomberg.
A subsidiary of New York Community Bancorp has entered into an agreement with U.S. regulators to buy deposits and loans from New York-based Signature Bank, which was closed a week ago - Reuters.
In a letter Sunday to the inspectors general of the Treasury Department, the Federal Deposit Insurance Corp., and the Federal Reserve, Sen. Elizabeth Warren (D-MA) called for the regulators to examine the management and oversight of Silicon Valley Bank and Signature Bank ahead of their collapses this month – WSJ.
Goldman Sachs Group, one of the most bullish banks on its outlook for oil, has nudged its forecasts down as worries over the banking sector and the potential for recession outweigh a surge in demand from China - Bloomberg.
Company Specific:
Berkshire Hathaway’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds - Bloomberg.
Signature Bank juiced its growth by combining a traditional commercial real-estate business with divisions catering to customers too small or complicated for its crosstown Wall Street rivals; yet the strategy ultimately hastened its own undoing, as its tightknit clientele drained their accounts in a panic - WSJ.
First Republic Bank saw its credit ratings downgraded deeper into junk status by S&P Global, which said the lender's recent $30 billion deposit infusion from 11 big banks may not solve its liquidity problems - Reuters.
One of the hottest apps in the U.S. right now is TikTok’s lesser-known sibling that is also owned by Chinese parent ByteDance; app trackers show that CapCut, a video-editing tool that helps people quickly create online videos and memes, has been downloaded more in recent weeks than TikTok – WSJ.